Spain’s online gambling market officially opened on 5 June 2012 with the launch of .es dedicated websites. In the first three quarter of 2013 alone, the Spanish market generated €168 million in gross gaming revenue.
But the path to becoming a lucrative regulated online gaming market has been a slow, and sometimes tortuous one.
In 2006, the Spanish government enacted legislation allowing sports betting in shops, retail outlets, and over the Internet. Regional governments could impose conditions as they saw fit. Madrid was the first to draft regulations and license conditions. Spain had been reluctant to sanction other forms of online gambling. However, some independent lottery agents for El Gordo had maintained a healthy presence on the Web.
In 2010, the Sectorial Gaming Commission, consisting of the 17 Autonomous Regions’ (AR) gaming authorities, the State Lotteries Monopoly, and the National Gaming Board, met to discuss publishing new draft laws to regulate online gaming. The draft laws would not contain specifics on taxation. And some ARs initiated drafting local regulations.
The Region of Madrid issued licenses as soon as operators met specified requirements and extended licenses to existing land-based casinos and bingo halls for offering online betting, casino games, and bingo.
Then, in 2011, the country’s cabinet approved a draft law to regulate all forms of remote gaming. The bill created a new commission to oversee advertising practices, prevent access to unlicensed Internet casinos, and implement fines for operators and citizens not adhering to the new gaming laws.
Spain’s Minister for the Economy estimated a legalized online gambling industry could generate annual revenues of €200 million at the time – a number that turned out to be prescient.
In May 2011, the new Gambling Law was endorsed and passed by the Spanish Congress. The law allowed for the establishment and development of online gambling with the exception of games exclusive to the National Lottery (LAE) and Blind Charity Lottery (ONCE). The bill also excluded live in-play betting and bingo due to the potential for dangerously addictive effects. Spain approved adding slot machines to online casinos in spring of 2013, but the regulations surrounding slots games have not gone into effect yet.
The bill, recognizing there was a thriving “gray” market already in existence in Spain, gave operators until 1 January, 2012 to obtain licenses and bring their advertising practices into compliance with regulations. Online gaming licenses needed to be obtained and would be valid for an 18-month period.
Companies that had been serving the Spanish market were not sanctioned. But they were required to pay back taxes (up to five years). It is estimated that bwin.party owed €33 million ($42 million), Sportingbet approximately £20 million ($32 million), and 888 close to €15 million ($20 million).
And tax rates moving forward ranged from 20% to 25%.
Individual licenses must be obtained for each game type provided by the applicant. Licenses are granted to companies willing to house their servers in Spain and operate via a .es domain name.
Like France and Italy, Spain segregated its pool of poker players from the rest of the world.
Unlicensed operators illegally participating in the Spanish market can face penalties as high as €50m.
In September 2012, ARJEL (France’s regulation body), announced it will enter into cooperation with Spain’s Dirección General de Ordenación del Juego (DGOJ) to share information about legalized online gambling and help with operating each other’s online poker network. But France’s parliament nixed the idea of sharing player liquidity for poker. Spain is still in discussion with Italy about sharing player pools.
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